Does renter have recourse when condo is sold?

Article by: KELLY KLEIN

May 23, 2014 - 3:01 PM

Q: I have been renting a condo in Minneapolis through a management company. The company recently contacted me about renewing my lease for another year, in advance of my 60-day notice period. The owners and I came to an agreement on a rent increase and to renew the lease for an additional 12 months running from May 1 through April 30, 2015. The management company then sent me an addendum to sign, but contacted me the next day and asked me not to sign the addendum because the owners wanted to show the condo to a buyer. The owners are allowed to show the condo if they are within the 60-day notice period. They gave me a 60-days notice to terminate my lease so a potential buyer could see the condo on March 1. Before March 1, this condo had been listed as a pocket listing, the requirement being that an investment buyer who would honor my lease could purchase the condo. The pocket listing was shared with a buyer who wants to live in the unit. When the owners were made aware of the buyer who wanted to live in the condo, that is when they gave me a 60-days notice to terminate the lease, despite having just sent me a written addendum to renew the lease. Do I have any rights or recourse in this situation?

A: Once the lease is signed, a tenant has the legal right to occupy the property for the lease term, even if the owner sells the property. The new owner would then be purchasing the condo subject to your lease, and would have to honor your lease terms. However, without a signed lease, then you are subject to having your leasehold interest terminated. In this case, it sounds like the paperwork went back and forth without being signed, and then the condo was sold to a buyer who wants to live in the condo. Unfortunately, even though the paperwork was sent to you, it was not signed, so you do not have the legal right to stay. You should, however, contact the management company or the previous owners to make sure the new owner still wants to live in the condo.

Late rent

Q: My renter has paid his rent late six out of the seven months he has rented from me. He always pays it eventually, but it gets later and later each month. Is this legal grounds to evict him? If so, do I need an attorney?

A: If the lease contains a clause identifying the date that the rent is due, you have the right to pursue an eviction any time after that date. You do not need an attorney to file an eviction action. Just go to your county courthouse and fill out the paperwork.

If you decide to pursue the eviction, you should know that accepting rent any time after the due date, even a partial payment, waives your right to pursue an eviction for nonpayment in that particular month. So, if rent were due on March 5, and you pursue an eviction on March 6, accepting rent after you file would preclude you from being able to evict the tenant. In addition, the tenant has the statutory right to pay all outstanding rent and certain costs incurred by you in pursuing the eviction (the filing fee, the cost of service, and up to $5 for attorneys fees) up to the time of the hearing. If the tenant makes full payment, then the tenant has redeemed the property, and you may not evict. So, in your decision to evict, you need to keep in mind that the tenant may pay the outstanding amount and then stay in the unit.

You may want to add a late-payment clause to your lease once the lease term ends. Under Minnesota law, late-payment fees generally have to be in writing, signed by both the tenant and the landlord, and are limited to 8 percent of the outstanding rent. That should cover some of the expenses and costs you are incurring relative to the late rental payments.

Some landlords do pursue an eviction action based on the tenant violating the lease by repeatedly paying rent late. This is not always successful, because courts know that landlords can protect themselves by having late fee clauses, and because the tenant has the statutory right to redeem by paying outstanding rent. So, most landlords eliminate the need to pursue these actions by inserting a late-payment clause in the lease, which is a good incentive for any tenant to pay rent on a timely basis.

Kelly Klein is a Minneapolis attorney. Participation in this column does not create an attorney/client relationship with Klein. Do not rely on advice in this column for legal opinions. Consult an attorney regarding your particular issues. E-mail renting questions to kklein@kleinpa.com, or write to Kelly Klein c/o Star Tribune, 425 Portland Av. S., Minneapolis, MN 55488. Information provided by readers is not confidential.